MAC: Mines and Communities

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Papua New Guinea update

Published by MAC on 2007-02-09

Papua New Guinea update

9th Feburary 2007

Last week we reported on the alarm with which a Chinese company's derelictions of duty - especically to its workforce - is being viewed in Papua New Guinea, in the context of the proposed Ramu nickel mine.

In fact, the project has created strident controversery for some years over its planned use of STD (submarine tailings disposal) - a point brought home last week by a Papua New Guinean environmentalist

The possible impacts of the submarine tailings disposal of tailings from the Ramu nickel mine could have a major effect on the commercial fishery in the Madang Province. An expert in environmental management and development looks into the problem.

Ramu's tailings plan a concern

Clement Kunandi Victor, Postcourier

9th February 2007

A RD Tuna Canners Ltd (RD Tuna) catches tuna species within the territorial 12-nautical mile zone (TNMZ) of Madang Province and produces canned tuna products for local and overseas markets. While Ramu nickel mine refinery will be using the submarine tailings disposal method to discharge its tailings into the seafloor of Basamuk Bay via a pipeline at a depth of 150 metres. The effect of tailings may affect RD Tuna's business.

How?

Upwelling is referred to as the movement of deeper ocean water to the surface of the sea. Upwelling at Astrolabe Bay is capable of bringing up tailings materials into shallower and biologically productive layers of the sea causing serious problem for the fishery in the area.

Under normal circumstances, upwelling is one of the most productive marine processes because it provides food for the fish and is often the site of best fishing.

Fine tailings would form plume shearing and float away from the main flow when caught between ocean layers.

Plume shearing exposes heavy metals to the food chain where fish either ingest tailing particles whole or take up leached metals through their gill membranes. It also increases turbidity and would drive away commercially valuable fish species. It also contains sharp and pointy particles that would damage fish skin and cause infection.

Biological effects

The water will be contaminated once a certain threshold level has been reached when the refinery starts discharging tailings and, dump waste rocks and soil into Basamuk Bay. The fish species would react to the change in water quality by suddenly being subjected to an increase in mortality, and so in the immediately proceeding years the biomass of all age classes of fish species would fall. The increase in level of toxicity and sedimentation of the water would also affect the fecundity of the fish species.

The deep-water fishery likely to be affected is tuna species. Plume shearing also has a potential to disrupt the migrations or to have an impact on spawning aggregations or nursery grounds of the tuna species.

The tuna species, which are highly migratory, covering large distances often along predictable migratory routes, would avoid turbid waters.

The fish fauna of shallower waters off Basamuk coastline is largely that characteristic of the clear water areas. Substantial increase in sediment and toxic levels in coastal waters could have serious consequences of the fish fauna in the area.

The submarine tailings disposal of tonnes of tailings will smother hundreds of square kilometres of seafloor, killing the benthic organisms. The benthic organisms are part of the ocean food chain.

Those organisms that do not simply die from smothering will instead become contaminated with toxic metals to an unknown extent. The more mobile predators will feed on these organisms and will carry the toxic metals through "vertical migration" from the depths to the shallower waters of the wider Astrolabe Bay.

Economic effects

The tailings pollution may cause the tuna catch to fall and will affect RD Tuna's business because of a decrease in tuna stock. The reduction in tuna catch will affect RD Tuna's cannery output. Hence economic surplus for RD Tuna would drop.

Currently RD Tuna could be enjoying a higher economic surplus, as there is no pollution to affect the tuna stock.

The start of mine production and subsequent discharging of tailings material could contaminate the waters of the Astrolabe Bay and the 12 TNMZ, resulting in tuna stock reduction.

The reduction in tuna stock would cause the value of the tuna catch to fall below the cost of harvesting and will affect the cannery output, resulting in the decline in economic surplus.

Because RD Tuna's fishing vessels will be catching less tuna stock at the same cost as before the tailings pollution. Furthermore, more effort would be required to catch reduced tuna stock that would be available.

Looking Ahead

RD Tuna have access to the European Union (EU) markets through the Cotonou Agreement. The agreement states that "any tuna species caught within 12 TNMZ will be accorded originating status for the purpose of exporting into EU member countries".

PNG's export quota of tuna products to EU countries is 1000 metric tonnes per year based on the agreement and the bulk of it is currently supplied by RD Tuna.

The price that consumers in Europe would be willing to pay for the tuna products may be sensitive to the perceived quality of the tuna species. Quality of tuna products will be questionable as RD Tuna catches tuna species in the 12 TNMZ where the tailings could contaminate the tuna stock.

Hence the EU consumers through the EU may not allow RD Tuna's tuna products to be imported and sold in their countries. Should this occur then RD Tuna will lose its lucrative European markets, where exports in 2005 netted $US44 million (K138.36 million) in foreign exchange for RD Tuna.

The quality of tuna products would be a disadvantage for RD Tuna.

However, it could be of advantage to South Sea Tuna, Frabrelle Limited and others to supply tuna products to meet this EU quota.

They could also increase their share of exports to meet the quota to cover the quota enjoyed by RD Tuna before tailings contamination of the tuna stock.

The marine Industrial park to be established at the Vidar Plantation will be an important strategic partner for RD Tuna and to some extent the South Sea Tuna and Frabrelle Limited factories.

The tuna species caught by the long distance fishing nations in other parts of PNG and, Central and Western Pacific countries' waters could off-load their tuna catch to be further processed at the marine pndustrial park. These companies could use some of the off-loaded tuna stock to produce tuna products for local and overseas markets.

Economically, how quickly RD Tuna's fishing effort adjusts to the changing fortunes of the pollution-damaged fishery would be offered by the economic opportunities elsewhere.

The marine industrial park would offer this economic opportunity for RD Tuna to use the quality tuna stock.

The current workforce that is employed in the RD Tuna's fishing vessels may be made redundant, increasing the social cost, as harvesting of tuna will be done by other fishing companies to supply the tuna stock to the MIP. If MIP were slow to materialise, then more extensive and protracted would be the unprofitability of RD Tuna, hence greater the social cost. That is, RD Tuna will be making losses and will be passing the cost of catching tuna to the consumers.

Waters further northwest and north of Madang town may be less or not contaminated with the toxic tailings and may still support the RD Tuna's operations.

But this fishery would eventually be over exploited, resulting in the reduction in tuna stock.

The decrease in tuna stock in the Bismarck Sea due to the highly migratory nature of the tuna species may also affect the production capacities of South Sea Tuna and Frabrelle Limited factories.

The coastal people including the Selleo Fishing Group may stop catching fish, as more effort would be required to catch fewer fish due to the reduction in fish stock. In a worse case scenario, they won't be allowed to sell contaminated fish.

The game fishing sport attracts anglers from within PNG and abroad to Madang may be affected in the future.

This would have an effect on the hospitality industry in Madang town that normally earns higher revenue during game fishing event due to influx of people.

- Clement Kunandi Victor holds a masters degree in environmental management and development, from the Australian National University, Canberra.